Which of the following best explains why firms in monopolistic competition face a downward-sloping demand curve while perfectly competitive firms do not?

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Answer

Firms in monopolistic competition are price takers.

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Monopolistically competitive industries have only a few firms.

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Monopolistically competitive firms face barriers to entry.

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Only industries with free entry and exit have firms that face horizontal demand curves.

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Firms in monopolistic competition sell differentiated goods.

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Which of the following best explains why firms in monopolistic competition face ...

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